Scandinavian media is today reporting that SAS will at a pressconferance tomorrow, apparently announce the cut of 1000 employes jobs and a 15 % in salary for the remaining. SAS Ground Handling will apparently be sold.

There has been though negotiations with the unions: acccept the cuts or SAS will go bankrupt.

Please note that this is currently not official but only reported in Scandinavian media. There will be a pressconference tomorrow.

I do wonder if this is enough, they have had problems for 10 years now, keep pushing that timeline for bankrupsy ahead of them. 3 nations, 40+ unions..SK is a mess of different visions, needs and cultures. In Sweden most blame the danish unions, I don´t know how that is in the other nations.

Its hard enough to feel united in one nation, try 3 different nations.

Could it be that this was the reason why they have not published their financial report yet? Maybe it is catastrophic so at least when they publish it they could say that they are doing something about it.

It seems that not everyone in SAS, especially Wikestad has understood this, the Norwegian attitude seems to be that if they fail, the government will bail them out, something which the government are not allowed to do.

SAS said a couple of weeks ago that they expect a profit for Q3 of this year. However the situation now is that SK are desperately trying to get new loans from banks.

The banks, however are not willing to lend money to SK without the individual governments agreeing to guarantee for the loans, however SK are now talking to the EU to make sure that they can do this in order not to end up like Malev.

This is a messy situation and I am honestly not sure that they can survive this.

Reason:

SK has about NOK 10bn, or about 1.8 bn $ in outstanding retirement benefits debt, they also have employees on very expensive contracts. I do not see any airline willing to take over these things. Most likely they would rather allow SK to go bankrupt and then pick up the remaining pieces and employ people on new contracts. Some people will definitely not approve of this, but to face the cruel facts: Either accept this or face unemployment.

SK has unfortunately been in severe situations for years, but unlike other airlines, they have not been able to recover and perhaps now the time is up.

According to Dagens Industri new information on SAS crisis, the EU has given the green light for the governments of Sweden, Denmark and Norway to provide state guarantees to the banks to renew loans at 4, 7 billion.

SAS's future lies in the hands of the unions, according to Dagens Industri.

An unofficial application to provide state guarantees came from the Scandinavian countries to the EU Commission's competition unit last week. According to Dagens Industri new evidence, the parties have reached a settlement in principle a preliminary promise ahead. And the green light has been received by the governments on Sunday.

The EU has apparently agreed to this on the grounds that the Scandinavian governments rarely asks for emergency loans. The EU will proabably demand that more of SAS becomes privately owned.

I think bankruptcy would be the most stupid outcome, especially after all those millions that were injected into the airline. On top of everything, SAS as a brand should live on because it is a symbol of Scandinavia (no matter what some people might say).

Quoting Mortyman (Reply 11):I think you can relax. Follow this thread. We should have a clearer picture of what is gonna happen at 08:00 cet today. I don't think that bankruptsy is going to be the result.

Pure guesswork. SAS situation is serious. How serious is really something we do not know. If banks do not want to extend loans SAS future is in the hands of the taxpayers in Denmark, Norway and Sweden and the EU. This seems to be the case now...

Targeting approximately 3 bn SEK of annual improvement from cost reductions and organizational restructuring and approximately 3 bn SEK increased liquidity from asset sales ~ New 3.5 bn SEK Revolving Credit Facility from Banks and Core Shareholders to secure financial preparedness conditional on signed union agreements and parliamentary approvals ~The Board unanimously supports the plan and recommends all employees to do the same ~ The Board will meet again on Sunday November 18, 2012 to decide if the conditions for the implementation of the plan exist

The 4 Excellence Plan, which was announced in September 2011, is on target to deliver approximately 5 bn SEK in EBT effect. Despite this success, SAS foresees the need for further improvements to secure its long-term competitiveness. In a challenging environment for airlines, SAS must take decisive action to address its cost structure, improve its capital structure on a long-term basis, and take steps to reduce the negative impact on equity in 2013 due to changed pension accounting regulations.

4 Excellence Next Generation to improve profitability
The Board of SAS has approved the 4 Excellence Next Generation (4XNG) plan to address the issues facing SAS. The 4XNG plan will improve EBT by approximately 3 bn SEK on an annualized basis and improve the overall cost flexibility through:

1.5 bn SEK in improved EBT is expected to be realized in the financial year 2012/13, with most of the remaining annualized benefits realized in the financial year 2013/14. The plan is self-financing and requires no new capital. The restructuring cost and one-off implementation costs will be approximately 1.5bn SEK, whereof 0.9-1.0 bn SEK in financial year 2012, and will be fully funded from expected savings.

New pension terms will mitigate the need for new equity
As a result of the revised IAS19, that will be applied by SAS as of November 2013, the SAS Group's shareholders' equity will be reduced when all unrecognized deviations from estimates and plan amendments will be recognized in full in shareholders' equity. The 4XNG plan will result in a transition, for the majority of the employees, from the current defined benefit plans to defined contribution plans. These changes will mitigate the negative impact on equity by an estimated 2.8 bn SEK, reduce defined benefit obligations by 19 bn SEK (58%) and reduce volatility in future earnings resulting from changes in pension assumptions. These pension changes, together with the other actions announced today, provide SAS with the confidence that it will retain a strong equity position.

Asset Disposal and Financing Plan to increase liquidity
The Plan involves a commitment to complete an asset disposal and financing plan, which totals approximately 3 bn SEK in potential net cash proceeds. The proceeds will improve SAS' internally generated financial preparedness and allow SAS to further reduce its financial leverage. The asset disposal and financing plan includes:

In addition, SAS will also actively consider opportunities to realize further value from its financed aircraft portfolio and other assets.

3.5 bn SEK Revolving Credit Facility conditional on signed union agreements and parliamentary approvals
SAS has reached an agreement to increase its existing 3.1 bn SEK revolving credit facility to 3.5 bn SEK and extend the term of the facility to 31 March 2015. SAS's bilateral facilities in the amount of 1.25 bn SEK will be cancelled as these facilities provide limited benefit at a significant financial cost. This new revolving credit facility alongside SAS' cash resources will provide the required financial preparedness while it completes its asset sales and realizes the full benefits from its cost reduction plans.

The new revolving credit facility is being provided by seven current lenders and SAS' core shareholders (The Kingdom of Denmark, the Swedish State, the Kingdom of Norway and KAW) on equal terms. The availability of the new revolving credit facility is subject to final documentation, parliamentary approval where required, and it is conditional on signed union agreements that are a central and integral part of the 4XNG plan.

SAS has initiated discussions with its relevant unions and will initiate a broad communication effort towards its employees to obtain their consent to the changes in the union agreements within a very short time.

Comprehensive plans create a financially strong SAS
The plans announced today are supported by our core shareholders and enable SAS to position itself as a strong, financially self-sufficient airline on a long-term basis. In connection with the approvals of the plans, SAS has set new financial targets.

It is normal practice in business. If you are selling a money making business you get profits in advance. For example, I think, Wideroe could be sold for 8x-10x yearly EBITs. So if you have a business, which is making 10M$ a year, you can get 100M$ now, instead loosing opportunity for more profits in long term.

So cash is more valuable for SAS now to survive instead of long term assets.

"Consider that the average salary for administrative staff is significant lower in Stockholm, compared to Oslo and Copenhagen, yes"

The nominal salary is significant lower in Stockholm than in Oslo or Copenhagen, but the social security is 31.42% on top in Sweden and 14% in Norway, whereas Denmark puts approx DKK 8,000 on top. So it is not an unequivocal lower total cost in Stockholm than in Copenhagen...

Denmark will be the end of SK, as I see Swedes and Norwegians as team players but not the call to arms Danes. The hardest battles of SK has been with the danish unions and I hardly expect them to give up without a huge fight this time either.

Quoting sweair (Reply 22):Denmark will be the end of SK, as I see Swedes and Norwegians as team players but not the call to arms Danes. The hardest battles of SK has been with the danish unions and I hardly expect them to give up without a huge fight this time either.

They've been jacking up their sallaries by 3-4% every year from the mid 90's to 2007. Last spring they wanted to be "team players" and agreed to a nominal wage cut. Now they "can't sacrifice any more"........ WTF??

The Ariline Business Map has been re-drawn in the past 5 - 8 years, and every one but SAS have adapted.

A SPF representative (Svensk Pilotförening) whent on the Swedish radio this morning and claimed that SAS has more staff per flying aircraft than any other carrier in the world. Wholy S**t!

Quoting sweair (Reply 22):Denmark will be the end of SK, as I see Swedes and Norwegians as team players but not the call to arms Danes. The hardest battles of SK has been with the danish unions and I hardly expect them to give up without a huge fight this time either.

They've been jacking up their sallaries by 3-4% every year from the mid 90's to 2007. Last spring they wanted to be "team players" and agreed to a nominal wage cut. Now they "can't sacrifice any more"........ WTF??

The Ariline Business Map has been re-drawn in the past 5 - 8 years, and every one but SAS have adapted.

A SPF representative (Svensk Pilotförening) whent on the Swedish radio this morning and claimed that SAS has more staff per flying aircraft than any other carrier in the world. Wholy S**t!

Many people in the western world need to wake up and smell the coffee, we live in a global economy. Your job could be done for 50% of the salary if you are in the wrong field, we sure love to buy the cheap electronics but no one wants to cut their own salary, there is two sides to any coin, most people only see one side, the one that gives you a benefit.

My position moved to India 8 years ago, I have adapted but I also got a wake up call, it´s not the 80´s anymore. Now I do work that is hard to outsource its more local and can´t really be replaced if not be an immigrant willing to work for 50% less and brake all labour rules we have here.

Adapt and survive! It´s a cynical world we live in and as long as we are employees we are no better than slaves really, profit for the owners decides. If I want to be free I have to start my own business and I probably will when I feel brave enough.

Time has caught up with SK, they did not want to adapt to reality, Norwegian has got a lot of flack for their hiring contracts but they seem to survive despite this, they have adapted to the times we live in.

Quoting EBGflyer (Reply 26):Apparently, The Norwegian Cabin Attendants are the first rejecting the salary cuts. Perhaps you're a bit quick there

I think you are a bit quick here, the article says nothing about the Norwegian Cabin Crew

Wikestad is the union boss for the ground staff (SGH). And they will not get a reduction in their salary...instead they are being sold to another company. So he will not be negotiationg with SAS in the future!

Quoting sweair (Reply 22):Denmark will be the end of SK, as I see Swedes and Norwegians as team players but not the call to arms Danes. The hardest battles of SK has been with the danish unions and I hardly expect them to give up without a huge fight this time either.

Maybe when SK is finished will they get it?

Yes there is no brotherhood / sisterhood anymore. Everybody is fending for themselves and for their interests. Not for common good of all 3 countries anymore.

Quoting timboflier215 (Reply 31):Who is the most likely buyer for WF? Do people reckon it will be Norwegian investors, or another airline/ airline grouping?

I have a feeling that selling WF to a private investor - including other airlines - could be a complicated or difficult thing. The reason is that WF is not an ordinary commercial business. WF ops is to considerable extent based on subsidies from the Norwegian government.

It's a good policy and absolutely needed since they want to keep the whole long country populated. They don't want to see 90% of the population move to Oslo and Bergen.

But who wants to invest when a considerable part of future revenue is subject to future decisions by a government?

Maybe it is best that WF is sold to the Norwegian government since in any case the government will have a big influence on its ops and financial conditions.

Always keep your number of landings equal to your number of take-offs, Preben Norholm

It was apparently the Norwegian minister of trade and finance that demanded that SAS had to sell Widerøe in order to show their commitment to the economical plan. SAS did'nt really want to sell it. But the Norwegian minister of finance and trade felt that SAS had to execute their possibilities of selling their off some of their own assets in order to stay afloat.

Quoting Mortyman (Reply 35):It was apparently the Norwegian minister of trade and finance that demanded that SAS had to sell Widerøe in order to show their commitment to the economical plan.

Trond Giske is a complete tool, it really surprises me that will all the cock-ups he's made in the last few years that he still has a job. The fact that he still has a job shows the utter lack of competent MP's in AP.

Quoting sweair (Reply 22):Denmark will be the end of SK, as I see Swedes and Norwegians as team players but not the call to arms Danes. The hardest battles of SK has been with the danish unions and I hardly expect them to give up without a huge fight this time either.

It seems like reality will eventually hit the Danes as well. Lufthansa was once interested in SAS, but with the illegal strike action from the Danes, and their refusal to move Intercontinental traffic to ARN scared LH away from buying SAS. Now they do not want them anymore.

The Danish union has stated that they will boycott this deal. The end is near for SAS?

Northport is 100% AY owned. RTG is a third party company to whom AY has outsorced arrival services. To Swissport AY has outsorced luggage handling (loading/unloading a/c). Check-in/gate services remain under the handling of Northport, which, at least at the moment is owend by AY.

Quoting prebennorholm (Reply 34):Quoting timboflier215 (Reply 31):Who is the most likely buyer for WF? Do people reckon it will be Norwegian investors, or another airline/ airline grouping?

I have a feeling that selling WF to a private investor - including other airlines - could be a complicated or difficult thing. The reason is that WF is not an ordinary commercial business. WF ops is to considerable extent based on subsidies from the Norwegian government.

Flybe? - it would sit in the gap between the UK and Finland operations. Compatible fleet and business model.

The flybe half year 2012/13 report that came on 8 November was no happy reading - red ink was used on the bottom line. The net debt increased with £20.3m this six months due to the low level of UK profits and the working capital decreased from £71.8m to £66.0m. flybe themselves concludes in the half year report: "Flybe is currently operating in possibly the most challenging conditions since its creation as a newgeneration regional airline 10 years ago."

My conclusion then is: flybe hasn't got the financial strength to even consider bidding on Widerøe.

Quoting KiwiRob (Reply 37):Trond Giske is a complete tool, it really surprises me that will all the cock-ups he's made in the last few years that he still has a job. The fact that he still has a job shows the utter lack of competent MP's in AP.

Quoting oykie (Reply 38):Lufthansa was once interested in SAS, but with the illegal strike action from the Danes, and their refusal to move Intercontinental traffic to ARN scared LH away from buying SAS

Sorry to say it, but I think that is pure nonsense, it was the economical collapse and the bankruptcy of Lehman Brother, that in the last minute prevented them from signing the agreement.
There was already an agreement!!!

Quoting oykie (Reply 38):It seems like reality will eventually hit the Danes as well. Lufthansa was once interested in SAS, but with the illegal strike action from the Danes, and their refusal to move Intercontinental traffic to ARN scared LH away from buying SAS. Now they do not want them anymore.

Illegal strike actions in Denmark happened last time years and years ago. And it seems like you forget that it was LH who couldn't get the financing in place for a deal in late 2008, when all papers pretty much were ready to be signed.
Since then we constantly hear the Swedes and Norwegians whine about the hub in CPH, to a degree that it is just embarrassing. But the fact is that SK has expanded more out of Norway and Sweden than out of CPH. You never hear Dansh crew complain about that. We only hear you guys constant whining going on and on and on and on and on and ......

Quoting copenhagenboy (Reply 44):Sorry to say it, but I think that is pure nonsense, it was the economical collapse and the bankruptcy of Lehman Brother, that in the last minute prevented them from signing the agreement.
There was already an agreement!!!

You are correct that the Spanair crash and Lehman Brother accident was the main events for LH backing of. But the Danes refusal of signing a new contract with SAS in 2008 did not help the situation. Why is it always the Danes that refuse to see the reality in the same way as the Norwegian and Swedish co-workers? The Danish employees had the highest pay increase for decades in SAS. The Norwegian and Swedish counterparts have not been as greedy. That is why it is unbelievable that the Danish co.workers now refuse to sign this contract. This is after all the final call for SAS.

Quoting Sandager (Reply 45):llegal strike actions in Denmark happened last time years and years ago. And it seems like you forget that it was LH who couldn't get the financing in place for a deal in late 2008, when all papers pretty much were ready to be signed.
Since then we constantly hear the Swedes and Norwegians whine about the hub in CPH, to a degree that it is just embarrassing. But the fact is that SK has expanded more out of Norway and Sweden than out of CPH. You never hear Dansh crew complain about that. We only hear you guys constant whining going on and on and on and on and on and

LH and SAS had a press conference planned and a date set. The Lehman Brother collapse and the Spanair crash was the most important factor for LH canceling. The Danish worker had their last illegal strike in 2007 that I know of. I am not whining, simply stating facts. The Danish employee that I have met have always been nice, so this is more of a culture thing in SAS. The unions in SAS are not aligned. And the Danish unions could have benefited working on their reputation.

At the end of the day I hope that the workers see that now is not a good time to be difficult and demanding. What is most important? Standing up for your rights while bankrupting your employee (ending up without a job), or saving the company you work for? SAS needs to stay competitive and employees have to understand that they should not be fighting against their employer, but for their employer!

In the American Airlines Robert Crandall is a former CEO that employees have deep respect for. He did reply to a letter from a pilot where he recommended the pilot to not vote against the contract with AA management. His view is just as relevant for SAS pilots not wanting to sign a new contract for SAS.

Quote:The key point is that the favorable outcome we achieved depended on a high level of cooperation and collaboration which was in turn made possible by lots of communication and consultation. It would be naïve to believe that everyone was happy about every decision and about every aspect of the way in which every dispute was resolved. But there was – for many years – a shared conviction that we were doing most of the right things and that the industry leadership we sought would be in everyone’s interest. As a consequence, we found ways to make our flights run on time, to lose fewer bags, to sustain fewer customer complaints and to make more money, which was widely shared by means of a broad based profit sharing plan.

Things began to change in the very late 80’s and early 90’s, and have not been the same since. I retired in 1998 because new initiatives of any type – routes, aircraft, systems, or service approaches – were typically held hostage to individual contractual modifications desired by one group or another and because of increasingly vitriolic personal attacks by one or another of the unions on the property.

Then he continues:

Quote: If American is to succeed in the years ahead, it must pay wages and benefits, and operate using work rules, which produce labor costs equivalent to or – while American gets itself back on track – lower than those of its major competitors. In the long run, no successful service company can offer compensation and working conditions that are materially different than those of its competitors.

[Edited 2012-11-13 23:11:36]

Dream no small dream; it lacks magic. Dream large, then go make that dream real - Donald Douglas

Quoting oykie (Reply 47):LH and SAS had a press conference planned and a date set.

And still LH were ready to take over SAS, with the current conditions. They just couldn't finance the deal. They didn't run away because of illegal strikes, as my Scandinavian neighbours keep mentioning despite these actions dating years back!!! Maybe it is about time the Swedes and the Norwegians realized that we are in 2012, and not 2007 anymore!

Quoting oykie (Reply 47):At the end of the day I hope that the workers see that now is not a good time to be difficult and demanding.

So do I. All three Scandinavian countries will loose millions and millions of dollars becuase of the lack of required infrastructure we will see if SK ends belly up. There is no other airline that can offer the frequencies and destinations that SK currently offers.

If there is profit in the SK routes others will gladly replace them. I am not worried about life without SK, I don´t depend on SK either. Remember, CPH is the biggest employer in Denmark, would SK fail that would hit Denmark a lot harder than either Sweden or Norway.

Its just business, cold and hard, people should accept this, the modern world works this way.

Quoting Sandager (Reply 49):All three Scandinavian countries will loose millions and millions of dollars becuase of the lack of required infrastructure we will see if SK ends belly up. There is no other airline that can offer the frequencies and destinations that SK currently offers.

The infrastructure (airports, ATC, fire service, railway lines, ...) will be intact after a SAS bankruptcy. The only part missing will be operators with capacity enough to fly the passengers (the first days and months).

Quoting sweair (Reply 50):Remember, CPH is the biggest employer in Denmark, would SK fail that would hit Denmark a lot harder than either Sweden or Norway.

You are maybe right if you count the number of employees loosing their jobs at a single airport (25% of the passengers at CPH are transfer passengers, and the main share of these are flying with SAS). But if you think about the passengers that can be affected, you will find the largest share in Norway (close to 50% of the now 28.2 million yearly passengers fly in to and out of Norwegian airports).

Quoting Sandager (Reply 49):Quoting oykie (Reply 47):At the end of the day I hope that the workers see that now is not a good time to be difficult and demanding.
So do I. All three Scandinavian countries will loose millions and millions of dollars becuase of the lack of required infrastructure we will see if SK ends belly up. There is no other airline that can offer the frequencies and destinations that SK currently offers.

There will be an implosion of routes offered. The Norwegian government has set up a crisis plan to handle an eventual strike, as there would be negative consequences for travelers for a while. I know this empty space will be quickly solved, but SAS is such a large provider of transportation in Scandinavia that if they stop flying it will have a negative consequence on the economy in Norway, Sweden and Denmark.

Quoting LN-KGL (Reply 52):The only part missing will be operators with capacity enough to fly the passengers (the first days and months).

That is true. SAS is replaceble, but as you say, replacing SAS capacity will take days and months.

Dream no small dream; it lacks magic. Dream large, then go make that dream real - Donald Douglas

Quoting oykie (Reply 53):That is good, and finally it seems like the Danish F/A union will talk to management If only the Danish pilots will face reality, I will speak positively about Danish part of SAS. I http://www.aftenposten.no/okonomi/Da...ndle-med-SAS-ledelsen-7045021.html

There will be an implosion of routes offered. The Norwegian government has set up a crisis plan to handle an eventual strike, as there would be negative consequences for travelers for a while. I know this empty space will be quickly solved, but SAS is such a large provider of transportation in Scandinavia that if they stop flying it will have a negative consequence on the economy in Norway, Sweden and Denmark.

I agree. Pilots seems to neglect reality and they should wake up. They seem to also forget that it is not just management who are giving them this ultimatum. It is in fact the owners (banks not least) who have given the management very little room for negotiation and they will be completely without a job if SAS folds. If they are lucky, they can then get themselves a job through a contractor flying for Norwegian or move to the Middle East where there might be opportunities, but on different conditions.

As mentioned here, some routes will be replaced. Not just by Scandinavian carriers (DY), but probably also by foreign long haul carriers. Since CPH would no longer act as a Star Alliance hub, I think a lot of routes would not be sustainable. SQ would probably close, AC as well.

The scenario for Intra-Scandinavia would be a disaster as well. Imagine a city like Stavanger with suddenly no direct flight to CPH instead of the currently 4 daily. It will probably be replaced over time, but probably not more than once or twice daily by DY. As much as DY/DU would replace SAS, I wonder how much capacity they would have to do this in the short run.

Maybe there is room for 2 or 3 new regional airlines in the ashes of SK? This is how a free market should work, if it is profitable there will be a replacement. There is no nostalgia or feelings in business, only money made or lost.

I would love if the Danes revive Sterling and make it their national airline.

SK is more than unprofitable, it is a culture and that culture is out of touch with reality, I wont shed a tear when SK leaves this world.

Quoting EBGflyer (Reply 54):The scenario for Intra-Scandinavia would be a disaster as well. Imagine a city like Stavanger with suddenly no direct flight to CPH instead of the currently 4 daily. It will probably be replaced over time, but probably not more than once or twice daily by DY. As much as DY/DU would replace SAS, I wonder how much capacity they would have to do this in the short run.

It happened in Australia when Ansett ceased flying. It didn't take Qantas and Virgin very long at all to fill the void. Within a few months it was like it never happened, and temporarily we saw aircraft upgaged, transferred from long haul to short haul and a huge influx of 737-400s that very quickly were replaced by 737-800s. Qantas had air canada flying 767-300s about the place for it for a while until it could beef up its own fleet and Virgin got stuff in from the then virgin express that really had too much capacity anyway to make much money from it. Norwegian would have no trouble at all finding loss making airlines in europe ready to fill the gap, not to mention the SAS receivers/ aircraft lessors would be very keen to quickly place some of that fleet. When Qantas set up jetstar, one of the reasons they picked the A320 was there was a big junk of jobless Ansett A320 type rated pilots around the place. They could move fast. SAS pilots would be there with a take it or leave it kind of offer. Finnair would no doubt very quickly redeploy some capacity and i wouldn't even be surprised if they started some long haul route via Scandinavia, particularly to the Americas. Not to mention from every big european hub, the existing players would both up gage and increase frequencies, as they all have plenty of routes that aren't making much money so all of a sudden with no SAS on these routes yields would improve. This would happen in a matter of weeks. Maybe as few as 1. US carriers would be quick to up gage as well. With all of this happening, if SAS failed, it might actually be very hard to establish anything like it again once the rest of the market moves.

Quoting EBGflyer (Reply 54):The scenario for Intra-Scandinavia would be a disaster as well. Imagine a city like Stavanger with suddenly no direct flight to CPH instead of the currently 4 daily. It will probably be replaced over time, but probably not more than once or twice daily by DY. As much as DY/DU would replace SAS, I wonder how much capacity they would have to do this in the short run.

It would be a disaster for CPH maybe. For Stavanger it would be no disaster on international flight - Lufthansa has 3 daily flights to Frankfurt, KLM has 5 daily flights to Amsterdam and British Airways has 2 daily flights to London Heathrow. I guess all three of these airlines will move capacity quickly to serve SVG. The real disaster for Stavanger will be capacity on domestic flights.

Quoting sweair (Reply 59):I get the feeling that if SK disappeared the void would be filled quickly as the market has over capacity anyway right now.

They have after all 140 planes (+Blue1 with 9 aircraft and Widerøe with 39 DCH-8) that fly everyday, and it will take long time for any other provider(s) to fill that void. For CPH 40% of their aeronautic revenues comes from SAS.

Quoting GCT64 (Reply 62):Lots of people asked where DY were going to utilise the 222 737s and A320s they ordered in January (+ 150 options) [I think I have got the numbers right] - perhaps we now know ......

I don't think that a SAS colaps is the primarley reason why Norwegian put an order for these aircraft. It will after all take several years before Norwegian receaves these aircraft. Norwegian's first Airbus 320 Neo will not arrive until 2015 and Norwegian's first Boeing 737 8 Max will not arrive before 2017. They will just have 3 longhaul Boeing 787 800 Dreamliners by the end of 2013. They would need far more longhaul aircraft alot quicker to replace SAS on longhaul. The shorthaul aircraft will have to come quicker too. Besides alot of the shorthaul aircraft are simply to replace older ones. Norwegian has stated that they wish their aircraft not to be older than 7 years. When that is said, Norwegian says it will have around 200 aircraft in the air by 2020. But that is quait a few year to.

First of all: there is eight unions that has to agree by Sunday. That's the unions for the pilots and cabin crews. Wikestad represent the ground staff in Norway, which will not have to accept he deal. And they are anyway being sold/outsourced, so it's irrelevant if they say yes or no

You just seem very attached and informed, it would be interesting to get word from an insider. 1500 people will have to find a new job, but who. It must be an awful situation at SK now, no one is safe for now and even of you survive the cut your wages will be dropped 15%.

Quoting JU068 (Reply 57):So if SAS would collapse, what are the odds that Denmark and Sweden would create their own carriers? (not necessarily founded by the government)

I think its more likely the existing players would step up. The European experience has proven now each country can't support a big hub, however there are long distance flights that given flights into other hubs that can indeed be supported. What if Norwegian and Finnair teamed up? Don't they after all own the rights to the "Nordic" brand still?

I honestly could see CPH losing long haul services to ARN without SAS funnelling traffic there. CPH's customers could easily use hubs at AMS and FRA. It will depend on service at the other end.

Well this assumes two things, the first being that somebody would need to replicate SAS's long haul route map the same, and also that SAS has the market right in this regard. With a different cost structure other things might be possible. A quick look at the boeing capital website shows you could get your hands on about 5 777-200ER's pretty much instantly. Likewise for the 747-400. It's common knowledge you could get your hands on Air India's 777-200LR's without too much trouble. So pretty much there alone I could get a long haul fleet with greater capacity of 15 aircraft, more than needed to replace SAS's 11 A330s/A340s. And before you say they're not the same size/range etc. The market would have changed. If the new operator isn't burdoned with SAS's old cost structure who says they wouldn't be able to fill a 747-400 say 4 times a week to Bangkok? Plus you can't tell me somebody like delta who currently might send a 757 won't upgage to a 767 or even an A330 if there is no SAS flying to New York anymore? Or United all of a sudden switching its flight to a 767-400 to EWR? When the Greeks lost their Olympic flights it happened just fine there. And when Varig failed in Brazil, TAM very quickly leased A340s and MD-11s to cover the gap and stepped up to the party. This was all within weeks. Why people think it can't happen is beyond me. if SAS stops offering a service and there is a demand why people think other businesses will not quickly jump on the opportunity I do not understand. This is after all, one of the most competitive businesses in the world with some of the smallest margins of any industry. Why do you think route planners all these other carriers wouldn't smell the chance for a pretty much instant profit?

Quoting ATLFlyer323 (Reply 10):I have tickets booked in December and January on them from the USA to Denmark and Sweden.... we don't think they will go the way of Malev before then do we?

Your wisest option is to buy travel insurance that will cover you in the event of sudden "unforseen" closure of airline operations and also to have a plan B = which other carrier would be likely to cover your SK routing and check their schedules and contact numbers. A full Y fare should be transferable to another Star carrier. If you have purchased the cheapest fares, it might be more difficult to be put on an alternative flight - if there is one.

"An increase of 100 euros for each level in the basic remuneration scale, except for flight attendants and pursers on the final level, whose basic pay will be raised by 50 euros. Additionally, all cabin staff is to receive a one-off payment of 320 euros, which equals the volume of 0.6 per cent.

The pay agreement thereby envisages an increase of 3.95 per cent in total volume in the remuneration scale. The union's demand for abolition of the so-called preliminary pay levels for around 6,000 staff has also been taken into account in the settlement. This will especially benefit staff on the lower pay tiers. In return, the yearly upgrade was suspended for all employees to a new level in the pay scale. Furthermore, an enhancement of productivity was agreed upon."

While SK is struggling with high labour costs, LH seems to be giving quite a considerable pay raise to the F/A's.

I don't think SKs wages are the worst problem, it´s their overhead that is too big and expensive. Like Norwegians boss said, they have about the same wages but the cost per seat is where the difference is.

Trim the fat in management first, too many managers managing thin air! And the whole operation is less than efficient, 3 nations, 37 unions, 1 hub and 2 secondary hubs/airports. What I have heard CPH is less than stellar in efficiency and cost.

It was very strange how it all went down. The co-operation was announced, but then buried in all silence with a laim excuse given that booking systems were not compatible, or something. I guess the two airlines never wanted to go in bed together in the first place, but at that time felt it necessary?

I never understood how these routes were operated from the point of crew/aircraft utilisation? I dont think Blue1 has/had crew based in the province aiports in Finland. That means that the crew and plane either did a revenue flight to the destination and then continued to CPH, or the aircraft and crew ferried to province airport to operate the flight to CPH. Either way, complex way to do operations and in the case of ferry flights, expensive!

Quoting sweair (Reply 78):What I have heard CPH is less than stellar in efficiency and cost.

It is funny how people hear a lot around. Most of the time a lot of crap..... I have no idea about the cost of operating out of CPH. Do you? Fact is SAS on time performance is impressive. Also out of CPH, so efficiency can't be too bad. Though I understand there are occassional problems. Like anywhere else.
And CPH is the only logical location of a Scandinavian hub. The governments of Scandinavia figured that out more than 50 years ago. Maybe it is about time the general population of Norway and Sweden figured it out to....

Quoting Sandager (Reply 82):Maybe it is about time the general population of Norway and Sweden figured it out to....

No, they did not see the logic that the SK management and Danes saw, thus resulting in a situation where a new company was born. Norwegian has silently been growing under the watching eye of SK. It has gotten bigger and bigger and is about to start transcon ops from the markets SK has refused to cater as they should have done. Though I understand from a business model point of view SK's will to concentrate especially LH ops to one hub, it has indeed hurt its reputation in its domestic market as a provider of convenient flight connections to 2/3 of the countries/nations invloved in the company.

Quoting kyrone (Reply 84):I was told by staff in CPH that if they work their lunch period, the compensation is equivilant to $75 - thats crazy!

This is taking it out of context. You must look into the situation in the country - will everyone else in Denmark get extra payment, if they are not given a lunch break? Is it dictated by law? What's the average pay level in the country? How long is the lunch period? Are the other conditions to be fulfilled for this kind of pay? What was the pay level of the person stating that?

For example, if certain conditions are met (public holidays, resting periods, weekly overtime, daily overtime etc), I must be paid 400% of my hourly rate and there's nothing that the union and the company could do about that - that's the law here. Naturally those conditions are not met many times per year, but when that does my hourly rate is a lot above $75 - and in general it's not considered crazy.

Quoting FlyingAY (Reply 86):This is taking it out of context. You must look into the situation in the country - will everyone else in Denmark get extra payment, if they are not given a lunch break? Is it dictated by law? What's the average pay level in the country? How long is the lunch period? Are the other conditions to be fulfilled for this kind of pay? What was the pay level of the person stating that?

It was a manager, I was told that was union rules, and that it covered the staff, and it was a 45 minute lunch break. To quote "If you work your 45 minute lunch break, the compensation is equivalent to $75 USD."

I did not see it on paper, and the conversation was how the companies benefits varied country to country. I do not know if everyone else in Denmark receives this, but as I was told its a union rule, I didnt think to inquire at the time.

It could have very well be an inflated statement, however I did not post it as fact - I did say it was what I was told by staff...

Maybe current staff on the board can enlighten as to whether or not its correct.

Quoting Sandager (Reply 82):And CPH is the only logical location of a Scandinavian hub. The governments of Scandinavia figured that out more than 50 years ago. Maybe it is about time the general population of Norway and Sweden figured it out to....

This is probably the main reason for today's problems - something that was correct 50 years ago isn't necessarily correct 50 years later.

Quoting Sandager (Reply 82):The governments of Scandinavia figured that out more than 50 years ago. Maybe it is about time the general population of Norway and Sweden figured it out to....

Things might have changed in those 50 years ... Ever thought about that ?

Quoting LN-KGL (Reply 88):This is probably the main reason for today's problems - something that was correct 50 years ago isn't necessarily correct 50 years later.

Indeed

Another thing to point out, wich Norwegian media pointed out yesterday are the different cultures in the 3 countries and how that might effect the success

Quote

- You have three countries, which after all is a bit different, and so you also feel that power bases are unevenly distributed, Sweden has traditionally emerged as the stronger part of the SAS. Denmark has had Kastrup that is a central hub for the SAS System. While Norway has earned money. This provides fertile ground for conflict

Quoting arn777 (Reply 93): The business cultures between the three countries are actually quite different and much more different than most people from the outside think. The Telenor-Telia case is one good example.

I can only agree. Previously it was all big Nordic to me. But once I was living for 7 years in Sweden and it became clear that the differences are bigger than one can imagine... Different mentality, different expectations. They ARE different!

Quoting sweair (Reply 92):What would a Kiwi know about the 3 different nations and cultures? Hey I dont claim to be an expert on sheep..

Lived in Norway for 6 years, been living with a Norwegian for 12 years, so I think I have a pretty good understanding. The three Scandinavian countries are more alike than they are different, culturally they are very similar, have a shared history, language......and I know nothing about sheep except I like to eat them and wool keeps me warm.

After this I am even more surprised you consider them alike. Maybe we Europeans understand the word culture differently than people from the new World. I'd say we have different working cultures within Finland, depending where you are from! I worked in a Nordic team while living in Stockholm, had a Dane as my boss and all the other Scandi nationalities were present, too. And indeed I noticed the differences. And the proudness they carry in what they do. Oh well, I had one Aussie guy telling me he finds Europe boring as all the countries are alike...

Quoting KiwiRob (Reply 94):Lived in Norway for 6 years, been living with a Norwegian for 12 years, so I think I have a pretty good understanding. The three Scandinavian countries are more alike than they are different, culturally they are very similar, have a shared history, language......and I know nothing about sheep except I like to eat them and wool keeps me warm.

Quoting okAY (Reply 95):After this I am even more surprised you consider them alike. Maybe we Europeans understand the word culture differently than people from the new World. I'd say we have different working cultures within Finland, depending where you are from! I worked in a Nordic team while living in Stockholm, had a Dane as my boss and all the other Scandi nationalities were present, too. And indeed I noticed the differences. And the proudness they carry in what they do. Oh well, I had one Aussie guy telling me he finds Europe boring as all the countries are alike...

This probably has a lot to do with perception and whether you're "looking" in or out. As an outsider the Nordic cultures might look more similar, then when we look upon ourselves.

Yes, there are significant differences between the cultures, but on a global scale, they are in the same culture group. It doesn't mean they are the same, but compared to other they are more similar

Quoting Someone83 (Reply 96):This probably has a lot to do with perception and whether you're "looking" in or out. As an outsider the Nordic cultures might look more similar, then when we look upon ourselves.

Yes, there are significant differences between the cultures, but on a global scale, they are in the same culture group. It doesn't mean they are the same, but compared to other they are more similar

Exactly and to use a closer example to the poster, you could put Australia and New Zealand in 'the same group". Of course those of us here see what we consider significant differences. But compare us to say, the greeks or Russians (other culturals from a european background) and you have a very big difference.

The UK does the same thing between scotland and england, but they are both British, and both closer than when you look at the french for example. Same thing if you look at Serbia and Croatia.

The Los Angeles and New York example is a good one because there are some big differences. They have a difference accent but basically speak the same dialect of english (its certainly not Queen's english, the spellings alone change that), they live differently in terms of housing, expectations, daily commute to work etc. But they have other things in common like diet, shared value systems, shared ideas about the role of the state, shared expectations that say, people in Mexico or even related countries like Canada are quite distinct from. Yes there are differences. But compare the differences between a Swede and a Norwegian and then Compare the Swede to the French or Spanish? It's then you start to see how inside one big country, states in the USA would have more differences (Think northeast states vs say Georgia or Texas) in their mindset.

Quoting Lufthansa (Reply 97):
Exactly and to use a closer example to the poster, you could put Australia and New Zealand in 'the same group"

I always thought kiwis and aussies were fairly different until I lived with one for a while, we are move a like than we want to think, I see the same with people in the UK, Scotts, English, Irish, Welsh more a like than different, same as the Scandinavians.

Living in Norway hardly makes you an expert on the 3 different cultures. I am born in Sweden but I have worked in all 3 nations and I can assure you all three nations are different, I actually like Danes better than swedes in general, Norwegians can hold a superior attitude towards swedes. Swedes are much for the consensus thinking, trying to agree on anything before anything gets done, Danes are more straight on and I like that.

A big difference is the relationship between management and the employee, in Sweden there is no strict hierarchy, endless meetings between groups and levels etc

And swedes don't fight as much or as hard to get their way, swedes are better at following rules and get in line.

Yes... the situation changed. Now it says that the pilots left the contract, cabin personnel left the contract, that personnel are requested to take cash with them on the next trip, and that the planes have been fueled up so that they can be returned back to base if a bankruptcy comes tomorrow. Sigh. Looking bad.

Quoting LN-KGL (Reply 106):From this a chapter 11 form of bankruptcy don't exist in Sweden - in fact all EU countries don't have a chapter 11 like form of bankruptcy.

So what we are looking at is, bankruptcy = cease operations? As opposed to the US situation whereby the carrier can keep operating pending a reorganization plan. In Scandinavia, what is the path to liquidation of assets, and is that likely? Lord knows, those A330s could fetch a nice price.

That is up to the person we call konkursförvaltare (sort of means "bankruptcy manager").
When a company goes bankrupt the konkursförvaltare will take over the management
of the now bankrupt company. He/She will decide if and in that case how a company that
have applied for bankruptcy can continue with their businesses.*

If they can't continue this person is responsible for the disposing (selling) of all of the
bankrupt company's assets.

Have in mind though that i am far from an expert in this area so I am not
sure that the above is entirely correct.

*I think in some cases bankrupted companies have continued with the business for
a while to see if there is any interest in buying the whole bankrupted
company. But usually the company ceases with the operations.

[Edited 2012-11-18 15:25:41]

Like a thunderbolt of lightning the Dragon roars across the sky. Il Drago Ruggente

Quoting thunderboltdrgn (Reply 108):I think in some cases bankrupted companies have continued with the business for
a while to see if there is any interest in buying the whole bankrupted
company. But usually the company ceases with the operations.

I think that continued ops can happen only when all creditors agree upon it. Old debts are then frozen, and operation is continued on prepayment basis only. I don't think that is relevant in this situation.

I expect that either they come to agreements which meet the conditions for state guarantees for the old debts, and they continue ops. Or they stop right now. There is hardly a middle way.

But I'm not a bankruptcy expert.

Always keep your number of landings equal to your number of take-offs, Preben Norholm

6 of 8 Unions have signed a new agreement early this morning. This is great news! 2 Unions are still trying to negotiate, including CAU (Danish Cabin Attendants Union). CAU and it's members have always been more loyal to them selves than SAS, so it will be interesting to see what pans out this morning.

Quoting sweair (Reply 99):Living in Norway hardly makes you an expert on the 3 different cultures. I am born in Sweden but I have worked in all 3 nations and I can assure you all three nations are different

I never said they were the same but variations.

Quoting CPHFF (Reply 110):6 of 8 Unions have signed a new agreement early this morning. This is great news! 2 Unions are still trying to negotiate, including CAU (Danish Cabin Attendants Union).

Who is the 2nd union that hasn't signed up?

I hope this works, SAS has been a great airline, it could be again with decent management and assistance from there staff.

Quoting okAY (Reply 95):After this I am even more surprised you consider them alike. Maybe we Europeans understand the word culture differently than people from the new World. I'd say we have different working cultures within Finland, depending where you are from! I worked in a Nordic team while living in Stockholm, had a Dane as my boss and all the other Scandi nationalities were present, too

I worked with International Fleet Sales at Volvo in the 1990's. We used to have the following saying when comparing Danes and Finns:

We'd quote the Finnish customer for 1 car, and they say: We like the price, we'll take 50.

We'd quote the Danish customer for 50 cars, and they say: We like the price, we'll take 1.

Considering that 15% of the Swedish population are now 1st or 2nd generation Immigrants, Sweden and Swedish people are not the same culture as 20 years ago.

Will this really save SK in the long run, they have had a bad time for a very long time now. Maybe this was the wake up call for the unions?

I flew Norwegian this weekend, I can not see what so many hate about Norwegian, its perfectly fine to fly them IMO. I don't need coffee or a meal, on a short 4 hour flight, only makes me more dried out after 4 hours in a 5% moisture cabin.

SK should take a note out of Norwegians operation, they seem to do ok.

Quoting okAY (Reply 95):After this I am even more surprised you consider them alike. Maybe we Europeans understand the word culture differently than people from the new World. I'd say we have different working cultures within Finland, depending where you are from! I worked in a Nordic team while living in Stockholm, had a Dane as my boss and all the other Scandi nationalities were present, too. And indeed I noticed the differences. And the proudness they carry in what they do. Oh well, I had one Aussie guy telling me he finds Europe boring as all the countries are alike...

There are differencies of course, but they're definitely in the same group. I work in a Nordics/Baltics unit of a large Swedish company and always find it easy to work with the Swedes, Danes and Norwegians. If we compare for example US and Nordics, or Middle East and Nordics the differencies are totally on a different scale than differencies between Danes and Swedes. However, there are many different cultures within one country - ie. Finnish Lapland might be more similar to Swedish Lapland than to Helsinki Metropolitan area... It's difficult to make generalizations that cover everything.

So it is one union left for SAS. I have the feeling that these paycuts are just life support that will prolonge the unevitable. I hope I'm wrong though. My family's Christmas holidays are booked on SAS, it seems to me now that they'll be around that time still.

Could SAS not now follow the example of Austrian, Iberia and Lufthansa in creating a seperate airline to take over staff and routes on a cheaper operation. Maybe a SAS express arm which eventually operates all flights.

I travel reguarly between London and Stockholm and almost always use BA or Ryanair. If booked in advance Ryanair can be as low as £10 each way (even though its to Skavsta) and if booking later BA is usually the same price as SAS and I get a sandwich onboard as well as T5 at LHR or LCY.

I believe the Airports (and ground handlers) are more responsible than Airlines when it comes to lost luggage. I have recorded 551 flights with SAS, and I have lost my luggade 21 times. How ever, 14 of those times have been on the CDG-CPH route............... 14 times out of 41 flights. Needless to say, I'm seldom allone waiting at the baggage carousel in CPH when arriving with SK from CDG.

Now, terminal 1 at CDG should be blown up and all the staff should be replaced, but I'll leave my experiences there for another thread.

Quoting KiwiRob (Reply 120):So you want Norwegians lousy on time performance and for me at least fantastic ability to lose luggage.

You must have been particularly unfortunate with your DY flights. I've only two flights where the luggage was lost; both flights were with SAS (inbound to OSL from MAN and from FRA). Sadly airlines don't report any numbers over lost luggage, and it is not possible to say clearly who's best (except for Ryanair - they just say they are loose the least bags ).

For punctuality it is much clearer, both SAS and Norwegian are reporting their own punctuality in their monthly traffic reports. Avinor is also measuring the punctuality at all Norwegian airports down to each flight number and in addition to this there is also some known independent measurement bodies. All these shows only a small difference between SAS and Norwegian with the regards to punctuality, and both airlines are among the top on time performers in Europe. It therefore seems again that you have been particularly unfortunate with your DY flights.

There is though a very clear difference between the two airlines; Norwegian has expressed that it is better to be late than to cancel a flight that may lead to many hours and even days of delay for the passengers. There is a very clear difference in regularity between the two airlines - SAS had a regularity of 98.8% the last 12 months while DY has 99.6% the same period.

There's been a lot of complaining from the Unions in the media this morning. They claim to have been "ambushed" by the SAS Management. Hu??

Isn't that exaclty what the Unions have been doing to SAS for the past 20 years? CAU (Danish Cabin Attendants Union) are now braggig on how they saved the Company. Jesus, they are the ones contributing to the rising costs since de-regulation.